I have the opportunity to purchase a car was from a friend. Self-serve, 6 bays, 6 vacuums. He’s given me numbers and its grossing 90k/year. I’ve managed it several times while he’s been gone, and it seems like a good opportunity. What questions should I be asking/what should I be looking at?
Good Purchase or Not?
- Thread starter Casey122
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Questions to Ask
1. Why does he want to sell?
What You Should Look At
This is a look into, but I would at least look into an in-bay automatic.
If there is no credit card acceptance, I would look into that. Cryptopay and Nayax would be most likely where you would go.
1. Why does he want to sell?
What You Should Look At
This is a look into, but I would at least look into an in-bay automatic.
If there is no credit card acceptance, I would look into that. Cryptopay and Nayax would be most likely where you would go.
Dan kamsickas
GinSan Technician
How old is the equipment?
Can you still get parts?
Does the manufacturer still exist?
How old is the electrical, water, and sewer service?
Has he told you the numbers or shown you actual financial documents?
Can you still get parts?
Does the manufacturer still exist?
How old is the electrical, water, and sewer service?
Has he told you the numbers or shown you actual financial documents?
washnshine
Well-known member
Sounds like you have had some time there managing it - what have you observed? Volume, quality, is it kept up? Do people seem to like to wash there? Decent clientele?
He has too much to manage right now, lots of rental property and just purchased a gym. Yes, there is CC processing.
I’ll check into the equipment this week and ask many more questions about it. He’s given me 3+ years of financials and we have served on staff at a church together for many years, so I know he’s not fudging the numbers. He’s talked to a realtor, and he said 800k on the high side. Maybe more realistic around 600k-700k. What’s your thoughts? It’s on .55 acre (commercial) on a high traffic road. Realtor thinks the land alone is worth 400k
I’ll check into the equipment this week and ask many more questions about it. He’s given me 3+ years of financials and we have served on staff at a church together for many years, so I know he’s not fudging the numbers. He’s talked to a realtor, and he said 800k on the high side. Maybe more realistic around 600k-700k. What’s your thoughts? It’s on .55 acre (commercial) on a high traffic road. Realtor thinks the land alone is worth 400k
I.B. Washincars
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It's worth whatever is valued most, business or dirt, and not a sum of the two. At 90K gross, 400K is a little high, but not out of reason. If the dirt is actually worth 400K, you would need to figure in deducting removal of the wash to make it usable for a different purpose. The numbers north of 600K are not reasonable.
OurTown
Well-known member
I agree with IB on this one. Based on what has been given to us I say $300K-$450K. Do the math on the return and it won't look very good at $600K I bet. Let us assume a net of $45K before labor if you do everything yourself which sounds like what he was doing. If you put labor costs into it I'm guessing a $25K-$30K return and that makes no sense to me at a $600K investment and probably no bank will lend on it. Word on the street these days is that car wash loans are (again) tough to get approved.
Roz
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$90K is $15K/bay or $1250/bay/month. Not terrible but not great - place may be underperforming and have some upside growth, depends on the number of functions you have in the bays. The key is to offer enough options to keep people washing their cars longer. Also if you are adding CC to the bays you should be able to grow the revenue.
At the end of the day you are buying cash flow on a mediocre run business so value is either land value or 3x gross revenue.
You should probably do your own real estate research because $800K for 1/2 acre sounds high unless you are in a large city on a coast.
At the end of the day you are buying cash flow on a mediocre run business so value is either land value or 3x gross revenue.
You should probably do your own real estate research because $800K for 1/2 acre sounds high unless you are in a large city on a coast.
traveler17
Well-known member
There is always some way to grow the revenue but I’m sorry but 800k is laughable on 90k gross. 3 to 4x the gross w the real estate is the unwritten rule unless like stated above it’s in a booming real estate area. If it is in a booming area why is it underperforming. If a friend of mine told me 800 I’d tell him he needs to get back on the meds 
traveler17
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How long ago was that?
FuturaFan
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We bought our wash with some help from Investment Joy. Brandon is actually a smart guy... We have significantly improved the place, installed and inbay, and are onto our second location. We should have it by the end of the month. Just need to sign the papers once the bank approves. The second location is basically a money printer… it makes a lot.
FuturaFan
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There’s some dude selling all his washes in the twin cities, he has 2 self serves for sale, 1 is an 8 bay and is selling for 1.9million… Hasn’t been used in years. The other one is a 10 bay and is selling for upwards of 2.1million. That one has also not been used in years. The dude is crazy, and the worst part is these washes are all located directly in the hood!There is always some way to grow the revenue but I’m sorry but 800k is laughable on 90k gross. 3 to 4x the gross w the real estate is the unwritten rule unless like stated above it’s in a booming real estate area. If it is in a booming area why is it underperforming. If a friend of mine told me 800 I’d tell him he needs to get back on the meds
It's not the car wash that makes it valuable. It's the land value. The dirt my car wash sits on is valued at way more than 3 or 4 times gross. I had a call the other day from a real-estate whore who said he had a buyer for my car wash and I said sure it for sale for land value, that was end of our conversation.
FuturaFan
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The area around the car wash is really, really bad… in the hood, could easily be a robbery target. The land is maybe half the size of ours, and we got ours for like 650k with a big lot, 33,300 sqft/0.77 acre lot with 8 self service bays, an unused truck wash bay, and an old automatic bay.